Lack of demand is hitting RAM and SSD chipmakers hard. So much so that they have started cutting their production due to high inventories.
The RAM sticks and SSDs we use in computers are, in simple words, just circuit boards with chips on them. While RAMs contain DRAM chips, SSDs contain NAND chips.
One of the biggest names in the world of RAM and SSD chip production is Micron, with almost 26% of market share revenue in DRAM manufacturing alone. Micron not only sells these chips to consumer RAM and SSD makers, but it also puts these chips into RAM and SSDs made by them under the Crucial brand made for consumers.
In the lock-down times, the demand for computers and its components had surged massively, leading to shortages and higher prices. Now as the things have opened up and so have the offices, the demand for PCs and laptops have slumped at massively too.
Slump In Demand
In September, we had reported that SSD prices are expected to get cheaper due to a lack of demand. It looks like things are way worse for these companies than we thought.
A few days ago, Micron announced that, due to the condition of the market, it’s cutting the production of both RAM and SSD chips by a massive 20% in the fourth quarter of this fiscal year, 2022.
Not only that, Micron says that as per its forecast of the year 2023, the growth in demand for RAM chips is going to go in minus. The demand for NAND chips (which power SSDs and others) too is going to see only single digit growth the whole year. These figures are year-on-year basis.
The inventory is big and the demand is less. So an aggressive cut in production, Micron says, is required, despite long term growth hopes.
Other Makers Hit Too
On the same day, Taiwan based tech market research analytics firm TrendForce has released information which shows not so great outlook for other RAM companies too.
TrendForce reveals that the DRAM chipmakers have seen a 30% drop in revenue in 3Q22, which is unprecedented and not seen since the 2008 financial crisis.
Samsung has seen the highest drop in revenue at 33.5%. SK hynix is not behind with a revenue drop by 25.2%.
It says that due to lack of demand in RAM, Samsung is moving its production elsewhere. It says Samsung was going to open a new DRAM making facility, but it’s going to slow itself down due to high inventories.
TrendForce mentions that SK hynix might put a brake on the migration to new technology. Micron too is expected to avoid moving to latest generation of RAM manufacturing yet.
Best Time To Buy RAM And SSD
This is a good as time as any to buy RAM and SSD for those who want to. The reason is simple, a cut in production will raise the prices of these products.
While those who want to buy DDR5 RAM can still wait due to high prices still, the best time to buy an SSD is right now. SSDs have never been cheaper than this and with a cut in the production of its chips, expect them to rise again. If not immediately, then by first or second quarter next year. Best to buy them when they are cheap as possible.
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